Porn on BlackBerry Overshadows Nastier Obscenity: William Pesek

Jan. 20 (Bloomberg) -- If you want to know what’s afoot in
Indonesia, solid clues can be found in buoyant retail sales,
property prices and stock valuations. For an even better
indicator, just walk the streets of Jakarta.

Validation of Moody’s Investors Service’s move this week to
upgrade Indonesia’s credit rating to the highest level since the
1997 Asian financial crisis can be found everywhere. Swanky
eateries, luxury shopping malls and hyper-modern office towers
are abuzz with signs that Southeast Asia’s biggest economy is
going places.

Yet a less favorable metric also deserves consideration,
and it involves pornography.

Research In Motion Ltd. says it will bow to public outrage
and government requests to block porn websites on its BlackBerry
browsers. That this issue is controversial in the nation with
the largest Muslim population isn’t surprising. It’s
disappointing, though, that Indonesia’s 240 million people
aren’t equally upset about a bigger outrage: corruption.

This column isn’t a defense of porn. If a government wants
to crack down on materials it deems objectionable, then so be it.
My worry is about misplaced anger. Why aren’t Indonesia’s masses
just as incensed by their leaders’ failure to raise tens of
millions out of poverty at a significantly faster rate?

The problem is institutionalized graft. It relegates all
too many to the ranks of those living on $2 a day by keeping the
benefits of rapid growth concentrated among the elites, not the
masses.

Attacking Corruption

As of 2007, 29 percent of Indonesians lived on $1.25 a day,
according to the Asian Development Bank. President Susilo
Bambang Yudhoyono aims to cut Indonesia’s poverty rate by about
a third over the next four years. The nearly 7 percent growth he
expects won’t be enough. He needs to attack corruption head on.

Indonesia is making progress. Just yesterday, the South
Jakarta District Court found Gayus Tambunan, a former tax
official, guilty of violating anti-corruption laws and sentenced
him to seven years in prison. Also, the nation’s ranking in
Transparency International’s corruption perception index
improved to 110 last year from 111 in 2009 and 126 in 2008. Yet
Indonesia still ranks behind Senegal and Kazakhstan and far
behind India and Thailand.

Many hoped that after his re-election in 2009, Yudhoyono
would clean things up more aggressively. Now is the time to do
just that to win investment-grade status. Moody’s raised
Indonesia’s foreign and local-currency bond rating to Ba1 from
Ba2, one step below investment grade.

Investor Optimism

Improvements to Indonesia’s public-debt position are
commendable and investors are noticing. On a four-nation trip
last week -- to Thailand, Indonesia, Malaysia and Singapore --
Standard Chartered Plc economists polled more than 800 clients.
Those in Jakarta were by far the most optimistic about 2011.

“Cutting corruption will certainly help to further enhance
the country’s appeal in international business,” says Tai Hui,
the bank’s Singapore-based head of Southeast Asian research.

So would addressing inflation. Indonesia’s central bank has
kept its benchmark interest rate at a record low of 6.5 percent
for more than a year, fanning overheating fears. It needs to
hike rates without slamming growth.

Yet I worry we’re missing the plot here. It happened in
2006 when thousands took to the streets of Jakarta to denounce
Playboy. Erwin Arnada is in jail for publishing an Indonesian
version of Hugh Hefner’s magazine without nudity. The irony is
that all too many cronies of former dictator Suharto won’t see
the inside of a prison cell for the untold wealth they bilked
from their people. Isn’t massive public graft an outrage at
least as worthy of anger as Playboy?

Indonesia Beckons

Indonesia’s appeal can be seen in entertainment trends.
Artists like Michael Buble, 311, Stone Temple Pilots, Ne-Yo and
Janet Jackson are all flocking to Jakarta to cash in on rising
consumption. Its market is a force to be reckoned with.

And credit where it’s due. The fourth-most populous nation
has performed remarkably since the dark days of the 1990s. Its
vast natural resources and enviable demographics -- about 27
percent of the population is under 15 -- are a big plus at a
time when developing nations are outperforming richer ones. The
government has worked to reduce the risk of terrorist attacks.

Corruption, however, stands between Indonesians and greater
affluence, and deserves more attention.

Indonesia isn’t alone. Take Malaysia’s reservations about
Beyonce’s bellybutton. In 2009, the American singer cancelled a
concert there as activists complained about her provocative
stage clothes and dance moves. If only Malaysians were equally
aggrieved by public corruption or how the ruling United Malays
National Organisation cares more about clinging to power than
making the nation more competitive.

Marcos Legacy

The Philippines often sees greater outrage over author Dan
Brown’s “Da Vinci Code” series than family members of late
President Ferdinand Marcos winning political office. His wife
Imelda now sits in the House of Representatives. It’s a wonder
why fictional books and movies often raise blood pressures more.

Objecting to porn or other forms of entertainment is indeed
the purview of governments. I just wish the obscenity of public
officials lining their pockets would evoke similar passions.

(William Pesek is a Bloomberg News columnist. The opinions
expressed are his own.)